Update: Even more testing later, it appears that while the island settings work at the start of the game now with the pre-game area 30,000 units away (tested player collision specifically), whenever a player dies and respawns in the same round, they revert back to default island settings. (Perhaps this is also why spawn immunity time doesn’t work because it’s only read post death?)
As mentioned in the original report, this only happens in Playtest mode, and functions properly if you do “Start Game” in UEFN.